Feds, 17 states suing Healthpoint over Xenaderm

Bryan Cohen May 18, 2012, 7:07am


WASHINGTON, D.C. (Legal Newsline) - Seventeen states and the federal government announced on Thursday the filing of a Medicaid fraud lawsuit against the Fort Worth, Texas-based Healthpoint Ltd.

Healthpoint allegedly started marketing Xenaderm, a drug used to treat decubitus ulcers, also known as bed sores, in 2002 without approval from the U.S. Food and Drug Administration. The company allegedly marketed the drug even though the FDA previously found that one of its active ingredients was less than effective. Medicaid does not pay for drugs that have not been approved and that have been found to be less than effective.

"We're pursuing this action to protect Marylanders who need proper medical care and to recover the tax dollars that have been wasted on ineffective medication," Maryland Attorney General Doug Gansler said. "Drug manufacturers cannot be allowed to profit at taxpayers' expense by simply sidestepping the pharmaceutical approval process."

The suit is now pending under the federal False Claims Act.

Healthpoint allegedly knew that Xenaderm was not approved and either knew of or recklessly disregarded FDA notices concerning trypsin, one of the drug's active ingredients. In the 1970s, the FDA found on at least two occasions that trypsin was ineffective as a debriding agent. The FDA rescinded market approval for products that contained trypsin as a debriding agent. Debriding agents are used to remove dead tissue and can be part of a treatment plan for bed sores.

Healthpoint allegedly falsely represented that Xenaderm was eligible for Medicaid reimbursement. Healthpoint allegedly caused Medicaid and Medicare to pay tens of millions of dollars throughout the nation for a drug that was ineligible for reimbursement and unapproved for use.

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